https://www.taxtmi.com/caselaws?id=393203 The Bombay HC held that education cess and higher secondary education cess are deductible business expenses under income tax law. The court examined Section 40(a)(ii) which prohibits deduction of "any rate or tax levied" but notably excludes the word "cess" unlike its predecessor Section 10(4) of the Income Tax Act, 1922. The legislative history revealed that while "cess" was included in the original Income Tax Bill 1961, the Select Committee recommended its omission from the final provision. The court ruled that this deliberate omission means cess payments related to business are allowable deductions, regardless of cess being collected alongside income tax. The mode of collection does not determine deductibility. Though the assessee's deduction claim wasn't in the original return, the appellate authorities were duty-bound to consider it when specifically raised. Decision favored the assessee. en-us Fri, 28 Feb 2020 00:00:00 +0530 Wed, 11 Mar 2026 12:13:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=393203 The Bombay HC held that education cess and higher secondary education cess are deductible business expenses under income tax law. The court examined Section 40(a)(ii) which prohibits deduction of "any rate or tax levied" but notably excludes the word "cess" unlike its predecessor Section 10(4) of the Income Tax Act, 1922. The legislative history revealed that while "cess" was included in the original Income Tax Bill 1961, the Select Committee recommended its omission from the final provision. The court ruled that this deliberate omission means cess payments related to business are allowable deductions, regardless of cess being collected alongside income tax. The mode of collection does not determine deductibility. Though the assessee's deduction claim wasn't in the original return, the appellate authorities were duty-bound to consider it when specifically raised. Decision favored the assessee. Case-Laws Income Tax Fri, 28 Feb 2020 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=393203